A game changer? China enacts first e-commerce law

In stark contrast to the rapid development of e-commerce in China, it has taken nearly five years and no less than four drafts for China to finalise its first e-Commerce Law. The new law will enter into force on 1 January 2019.

This new law has a remarkably broad scope, encompassing many aspects of e-commerce, including, for example, e-payments, product safety, data protection, cybersecurity, anti-competitive conduct, and intellectual property infringement. The law also covers all the main players in the e-commerce industry in China, from the platform operators (like Taobao or JD.com), the in-platform operators (e.g. those with an online shop on T-Mall) and other operators who conduct e-commerce through their own websites (e.g. websites of bricks and mortar retailers) or any other network services (e.g. public account sellers on WeChat). The long-drawn-out legislative process points to the protracted debates going on behind the scenes between the various stakeholders in this space, with the stakes being particularly high for many of them. In particular, this note asks the question whether this law has struck a fair balance between the often competing interests of e-commerce platform operators, in-platform operators and consumer rights? Does it come down too hard on or is it too lenient on e-commerce platforms and in-platform operators who sell defective or infringing products? Should even the smallest and most vulnerable of the online sellers be required to register and pay taxes so that consumers have some recourse? In the end, the answer depends on which side of the fence you sit.

This new law may not be a complete game changer, but it definitely touches most businesses in China, one way or another; for those that are not in the market yet, it is a market that has huge potential and drawing power, with the huge spending power of the Chinese consumer being the pot of gold at the end of the rainbow. Please click here to read the full article.

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